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AMD in Freefall: They're Worth Less Than ATI Price

The company is facing a financial collapse because of recent mess-ups

Dec 10, 2007 10:46 GMT  ·  By
The game is almost over. Insert coin. Oh, I forgot, AMD falls short of coins.
   The game is almost over. Insert coin. Oh, I forgot, AMD falls short of coins.

The last week has turned into a financial nightmare for chip manufacturer AMD. The company has reached the lowest share price and witnessed a true freefall in the market value: the whole company is now worth $5 billion, a shameful value for a company who could afford paying $5.4 billion for the ATI business takeover back in July 2006.

On the other side of the fence, grass is much greener and market values are amazingly high. AMD's most fierce competitor, Intel, enjoys a 162 billion market value, which makes the company almost 32 times the size of AMD when it comes to money. As if the competition in the CPU manufacturing sector were not enough, the video business also has gloomy perspectives: Nvidia have raised their market capital up to $19 billion, almost 4 times the whole AMD business.

Intel, AMD's major competitor in the CPU business, has been on a roll for the past 18 months and is now worth around $162 billion, which makes the chip giant more than 32 times the size of AMD in monetary terms. The competition's burden is still heavy on AMD's neck, since there will be a long shot for the company to surpass the heavy-weigh Core 2 Extreme QX6700 and the GeForce 8800 GTX headlines.

Phenom's unveiling has been a true disaster and I won't mention the reason, since I have been writing about it for some time. There is no mercy for AMD's mess-up, since they have been slapped by their own secrecy: they picked a small bunch of independent reviewers just before the launch, while the others failed in taking a look at what was happening.

If AMD had chosen to be more transparent, the result might have helped them keep a clean name at the cost of yet another delay. There's no difference between not having a CPU because it's not yet released and having it lying useless, consumed by an engineering screw-up.

Hopefully for AMD, they still have a jolly joker card in their pocket: the Radeon 3800 series seems to be quite promising and once the hardware shortage is fixed, it might become the goose to lay golden eggs and save AMD's depleted treasury.